Digital Digest: The Rise of the E-book Accelerates

It may not have been The Year
Print Died, but 2009 will undoubtedly go down as the year digital literature
became impossible to ignore. From celebrity authors' crowdsourcing stories
through Twitter, to the proliferation of online publishing platforms, to the
bruiting discord over the Google Book Search settlement, something new is
plainly afoot in the publishing world, even if the ramifications for writers
are still more a matter of conjecture than measurement. One trend is clear: The
nascent e-book market has been outpacing its hard-copy counterpart for some
time and shows every indication of accelerating. As of this writing, the
Association of American Publishers reports a 177.3 percent increase in
digital-book sales over the first eight months of 2009—and that's on top of a
68.4 percent jump recorded the year before.

Among the more visible signs of a shift is the clutch of
electronic reading devices suddenly clamoring for consumer attention. Samsung
(Papyrus), Elonex (eBook), iRex (Digital Reader), and Barnes & Noble (Nook)
all debuted e-readers in the second half of 2009, while Sony—a player since
the medium's early days—revamped its existing lineup of Readers. From its
introduction in 2007, the one to beat has been Amazon's Kindle, which lately
boasts international wireless functionality. The Seattle-based online retailer
is notoriously tight lipped when it comes to sales figures (CEO Jeff Bezos
has even gone on record saying the company may never divulge its Kindle stats),
but a fall 2009 report by Forrester Research put Amazon's share of the e-reader
market at 60 percent. The same study—which boosted estimates issued just five
months earlier by 50 percent—pegged U.S. e-reader sales last year at three
million units, a number that's expected to double in 2010. Small wonder, then,
that by late October both Amazon and Barnes & Noble had declared their
respective e-readers the best-selling items in their catalogues.

Far harder to quantify are
the effects of the e-book explosion on literary culture. According to the New York Times, Amazon says that Kindle owners buy slightly over
three times as many books as they did before purchasing the device, and Sony
claims that its customers download an average of eight e-books a month. For titles
offered by Amazon in both print and digital formats, Kindle editions reportedly
now account for nearly half of sales. While increased book buying might sound
like a good thing, the dubious logic that treats print and electronic
literature as equivalent has translated this latest trend into a decidedly
inauspicious prospect for bricks-and-mortar booksellers. Despite efforts by
Barnes & Noble to keep its e-reader customers coming into stores—including
specially designed "Nook areas" and free on-site Wi-Fi—analysts responded to
the new device by promptly downgrading the company's stock. "As the math
currently works," wrote Credit Suisse analyst Gary Balter, "each sale through a
Nook is not just unprofitable but potentially replaces a higher-margin sale at
stores."

But the old and new formats
clearly aren't interchangeable to consumers. For one thing, readers expect to
pay far less—if anything at all—for digital books. A British YouGov survey in
October found that while only 4 percent of respondents had read an e-book that
month, a solid 70 percent of that group had obtained the work (whether legally
or not) for free.

Publishers seem to
understand this—at least in principle. A poll at the 2009 Frankfurt Book Fair—the
world's largest international gathering of industry professionals—showed that
almost 80 percent of publishers agreed that digital titles should be less
expensive than their printed counterparts, although they remained "completely divided"
over just how much cheaper. Of particular concern is the fact that Amazon and
its ilk have reportedly been paying publishers the traditional print rate
(usually half the cover price) for each e-book sale, patiently operating at a
loss while sweeping up valuable market share. As these vendors increase their
clout, publishers are worried that wholesale prices will be forced down, eating
away at their margins.

One predictable response is to squeeze the writer. In
October, Macmillan drew the ire of agents and authors groups—who have become
increasingly insistent that the comparative cheapness of digital publishing
entitles writers to a bigger piece of the pie—when it dropped its royalty rate
on e-books by 5 percentage points. Another response is simply to delay the
electronic release of lucrative books in order to wring maximal gain from
hardcover editions, as several publishers did last season with celebrity-authored
titles.

But these are symptoms
rather than solutions. Realistic long-term strategies for writers, as well as
publishers, will depend on recognizing that digital books, while they won't be
replacing print any time soon, have finally become the standard of exchange in
the publishing world.

Adrian Versteegh is the
editorial director of Anamesa.
He lives in New York City.

“A poll at the 2009 Frankfurt Book Fair showed that almost 80 percent of publishers agreed that digital titles should be less expensive than their printed counterparts.”

Reader Comments

The thing about really big, disruptive change is that the people who are deeply invested in the status quo rarely see the scale or scope of what's bearing down on them. After what must seem like an eternity to the rest of us, they seek reassurance by minimizing... "Oh it won't be all that very different from what we have right now." Then the wave hits and they're gone.
The good thing about eBooks is the bad thing about eBooks—if you happen to be a big, old school, hit or miss, type publisher. The cost of manufacturing and distribution is near zero, and what was once relatively scarce (a printed copy that you had a degree of control over access to) has now become abundant (i.e., you have little to no control).
The big publishers that survive will get very good at a new kind of marketing & promotion; they will be able to make money with much lower prices being paid for eBook downloads, and they will restructure organizationally around content areas in which they are plainly superior to their competition.
Indie artists are going to become much smarter and better at developing their own publishing platforms, and publishers will need to offer artists significant value/expertise around access to a new global marketplace, or they'll largely become the occasional topic of nostalgic conversation over drinks about the good old days that nobody remembers. Richard Geller www.aSiteAboutSomething.com

jimdefilippi says...

I have fallen in love with E-readers. My plan: Why pay for my E-books? I download books that are “Rebar Tough and Built to Last,” by some of the country’s best authors, for free, at BrownFedoraBooks.com, as well as other free download sites.

Related Reading

In a statement released yesterday afternoon, Barnes & Noble announced the launch of the Barnes & Noble eBookstore, which it says will stock every available e-book from every publisher, as well as e-book originals. The 700,000 titles currently on offer are compatible with the iPhone, iPod Touch, BlackBerry, and most personal computers, but will notably not work with the Amazon Kindle or the Sony Reader.

Yet another contender entered the rapidly crowding e-book market yesterday when electronics giant Samsung announced the South Korean debut of its first e-book reader, the SNE-50K. The six-and-a-half-ounce device, which will retail for the equivalent of about $270, is not expected to reach the American market until 2010.

Sony announced the latest in its series of attempts to shake Amazon’s dominance of the e-book market today, saying it will scrap its proprietary e-book format in favor of the ePub standard. Unlike Amazon’s Kindle format, the ePub standard—developed by an industry group that includes HarperCollins and Random House—allows e-books to be accessed and shared across a broad variety of devices.